324 S 4th Ave Ave E

Ely, MN 55731

$149,200C

4 bd · 3.0 ba · 2,430 sqft · Built 1898 · Other · Active · 71 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,432/mo
• Mortgage (P&I): −$782
• Tax + insurance: −$146
• HOA: −$0
• Vac / Maint / Mgmt: −$301
• Net cashflow: $203/mo
• Annual: $2,432/yr
• Cap rate: 7.92%
• Cash-on-cash: 5.82%
• DSCR: 1.26
• 1% rule: 0.96%
• Cash to close: $41,776

Investor read

• This is a 4-bed/3.0-bath other listed at $149k.
• At list price, monthly cash flow is $203 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $143k (4.0% below list).
• It's been on market 71 days — a 6% lower offer ($140k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $140k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#128 in MN, #2,900 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, employment F.
• Ely Public School District (town): math 37% / reading 56% proficiency, ranked #175 of 301 in MN (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1898 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 128 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 3 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Cap rate 7.9% vs local median 4.0% in Ely — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• It's been on market 71 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1898 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.